• Weekly problem sets and reading responses
• Midterm
• Final

Recitations are for:

• Discussion of broader issues
• Explanation of questions from lecture
• Review of lecture material

Today we will address the “development” side of Sustainable Development.

1. What do we mean by development?
2. What has development meant historically?
3. What should development mean?
4. Is it a useful term?

In the context of Sustainable Development:

1. What is development?
2. What are its characteristics?
3. When did it start as a phenomenon?
4. When did it start as a concept?

Definition: the act, process or result of growing and becoming more mature, advanced, or elaborate.

Rooted in Enlightenment belief in Progress, associated with modernism.

Development was a social evolutionary concept, where societies went through stages:

1. Hunter-Gatherers
2. Agricultural
3. Industrial

Associated with corresponding racial hierarchy.

Transformation towards elimination of poverty. Truman on the “under-developed” world:

“More than half the people of the world are living in conditions approaching misery. Their food is inadequate. They are victims of disease. Their economic life is primitive and stagnant. Their poverty is a handicap and a threat both to them and to more prosperous areas.”

Is development a useful concept?

If so, why?

If not, what would you replace it with?

How can we compare societies? The implicit goal in development is an ordinal ranking of states of the world– i.e. would you rather live in world A or world B?

John Rawls proposed the thought experiment of choosing between worlds from behind a “veil of ignorance.”

How can we compare drastically different cultures?

Anecdote: “you just want to turn Niger into Germany!”

Historical example: the (incomplete) adoption of European social norms by Japan after the Meiji Restoration.

Is there necessarily a trade-off between economic development and conservation of local cultures?

Sen expresses living standards as “capabilities,” with many dimensions:

• Health
• Material goods
• Education
• Civil Rights
• Leisure
• Type of work
• Arts
• Nature

While appealing, this does not allow for ordinal ranking of societies, except within a single dimension.

Given different dimensions, how can we construct a single-dimensional index in order to make comparisons?

One answer: make arbitrary assumptions. E.g. the calculation of HDI.

\[ HDI = \frac{\frac{LE-25}{85-25}+ \frac{MYS+EYS}{2} + \frac{log(GDP)-log(100)}{log(75000)-log(100)}}{3} \]

where LE is life-expectancy, MYS and EYS are mean and expected years schooling, and GDP is gross domestic product per-capita.

Given a group of individuals, how do we construct a measure of group welfare, as opposed to individual?

How do include inequality?

One answer: average. The HDI, as seen above, takes simple averages of life expectancy, years of schooling and gross national product.

How does economics solve these two aggregation problems?

How do we make social welfare statements in economic terms?

What it is:

• The sum of marketed economic activities within a political boundary, weighted by the market prices of said activities.

What it isn’t:

• A measure of national income. That would be GNI. E.g. Ireland’s GDP is 20% lower than its GNI.

• A measure of all economic activity. Historically, the vast majority of productive activity was non-marketed and therefore excluded from GDP.

Evaluate the statement:

World GDP per capita is $ 18,000 per year. By the UN definition, poverty is an income of less than $2 a day. Therefore, the only thing needed to eliminate poverty is to redistribute income.